A bond with a coupon rate of 7.2%, maturing in 10 years at a value of $1,000

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A bond with a coupon rate of 7.2%, maturing in 10 years at a value of $1,000 and a current market price of $800, will have a yield to maturity (using the approximation formula) of
a) Between 10% and 10.5%
b) Between 10.5% and 11%
c) Between 11% and 11.5%
d) Between 11.5% and 12%

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Personal Finance

ISBN: 978-1133595830

12th edition

Authors: Thomas Garman, Raymond Forgue

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